In re Appeal of Johnstown Associates

In In re Appeal of Johnstown Associates, 494 Pa. 433, 431 A.2d 932 (1981), rents in a subsidized housing project were fixed by the Department of Housing and Urban Development at a rate below the prevailing rate for comparable non-subsidized units in a long term arrangement in return for a subsidized mortgage. The taxpayer argued that the rent restrictions should be considered in valuing the property. Our Supreme Court agreed, holding that the certitude that the property did not have the potential for rental profit increases must at least be considered, but went on to hold that the depreciated tax shelter benefits associated with owning this type of property could be taken into consideration. Id., 431 A.2d at 935.